Sembcorp's 1,320-megawatt power plant in India secures 25-year power purchase agreement
Friday, Apr 19, 2013
Sembcorp Industries (Sembcorp) is pleased to announce that its joint venture in India, Thermal Powertech Corporation India (TPCIL), has signed a long-term power purchase agreement with the Andhra Pradesh Power Distribution Companies, wholly owned by the government of Andhra Pradesh. Under the power purchase agreement, 500 megawatts of power will be sold to the Central, Eastern, Southern and Northern Power Distribution Companies of Andhra Pradesh for a period of 25 years.
Sembcorp owns a 49% stake in TPCIL through its wholly-owned subsidiary, Sembcorp Utilities, while Gayatri Energy Ventures, a wholly-owned subsidiary of Gayatri Projects, owns the other 51% in TPCIL.
The Rs 6,869 crores (S$1.9 billion) 1,320-megawatt coal-fired power plant, located in Krishnapatnam in Andhra Pradesh’s SPSR Nellore District, is Sembcorp’s first power project in India. The power purchase agreement will not only provide a stable long-term revenue stream, but also enable the company to play an important role in helping to reduce the severe shortage of power supply in Andhra Pradesh. The state currently faces severe power shortage of up to 19% of unmet power demand during peak periods. In addition to the inadequate generation within the state, the transmission corridor, which brings power into southern India from the rest of the country, is also limited in its capacity. As such, the plant, located in southern India, will play an essential role in helping to mitigate this shortage when it commences operation by the second half of 2014. The plant will also apply supercritical technology which allows for enhanced efficiency, thereby reducing emissions of carbon dioxide and other pollutants by consuming less fuel per unit of electricity generated compared to conventional sub-critical coal-fired generating units.
The signing of the power purchase agreement is not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp Industries for the current financial year.